Commissioner of Labor of North Car. v. Dillard's

• Decision Date: 02 February 2000
• Docket Number: No. 1:99CV00398.,1:99CV00398.
• Citation: 83 F.Supp.2d 622
• Court: U.S. District Court — Middle District of North Carolina
• Parties: COMMISSIONER OF LABOR OF NORTH CAROLINA, Plaintiff, v. DILLARD'S, INC., Defendant.

83 F.Supp.2d 622

COMMISSIONER OF LABOR OF NORTH CAROLINA, Plaintiff, v. DILLARD'S, INC., Defendant.

No. 1:99CV00398.

United States District Court, M.D. North Carolina.

February 2, 2000.

Victoria Lewis Voight, Raleigh, NC, for Plaintiff.

Jacob J. Modla, Charlotte, NC, for Defendant.

MEMORANDUM OPINION

BEATY, District Judge.

This case is before the Court on a Motion for Remand [Document # 3] filed on June 14, 1999, by Plaintiff, the Commissioner of Labor of the State of North Carolina (the "Commissioner"). Defendant, Dillard's, Inc. ("Dillard's") filed a response in opposition to the motion for remand. For the reasons that follow, Plaintiff's Motion for Remand is hereby GRANTED.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff, the Commissioner, filed the present action on December 28, 1998 in the Forest County North Carolina Superior Court pursuant to the Retaliatory Employment Discrimination Act of North Carolina ("REDA"), N.C.Gen.Stat. § 95-240 et seq. Compliance with the statute is enforced by the Workplace Retaliatory Discrimination Division of the North Carolina Department of Labor ("WORD"). The basis of the claim in question is that Dillard's violated REDA by engaging in acts of retaliation and discrimination against an employee because she exercised her rights under REDA to file a claim pursuant to the Workers' Compensation Act of Chapter 97 of the North Carolina General Statutes. Specifically, Beverly Cleaver ("Cleaver"), a sales clerk for Dillard's suffered an on the job injury on June 5, 1996. Thereafter, she filed a workers' compensation claim for benefits due to the injury which had kept her out of work for a period of time. Cleaver's injury prevented her from returning as a sales clerk, a position in which she earned hourly wages of $13.55. Dillard's, instead, assigned Cleaver to a customer service position and lowered her salary to an hourly wage of $9.00. Cleaver could not perform her duties as a customer service representative because of the restrictions her physician placed on her activities. Cleaver alleged that Dillard's did not attempt to make any modification so as to allow her to perform the duties of the customer service position. Dillard's ultimately offered Cleaver another job as a sales support/sales secretary, which she accepted. However, Dillard's never actually placed her in that position. Due to further problems related to her injury, Cleaver was out of work for a considerable period of time. During this period of her leave, Samuel Moorier, a North Carolina resident, acting as Dillard's' operation manager, sent Cleaver a letter on July 17, 1997 notifying her that her employment with Dillard's had been terminated. The reason given for the termination was that she had already used the maximum of six months leave of absence and was not eligible for any more.

As a result of Dillard's actions, on July 25, 1997, Cleaver filed a complaint with the Department of Labor on the basis that Dillard's had retaliated and discriminated against her in violation of REDA because she filed a workers' compensation claim. In particular, Cleaver asserted that Dillard's had retaliated and discriminated against her by placing her in a position that did not meet her doctor's restrictions, refusing to transfer her to the sales support/sales secretary position she had been offered, and terminating her while she was on a leave of absence for work related injuries. After undertaking an investigation, WORD, the enforcement division of the Department of Labor, determined that there was a reasonable basis to believe that Dillard's had committed the violations as alleged by Plaintiff. When the Department of Labor's efforts of informal conciliation between the parties failed, a Notice of Conciliation Failure was mailed to Dillard's on October 9, 1998. The Commissioner's Complaint does not indicate that a right-to-sue letter was issued to Cleaver. Instead, it is alleged that on December 28, 1998, the Commissioner, pursuant to N.C.Gen.Stat. § 95-240, et seq., filed a civil action in the Forsyth County Superior Court of the State of North Carolina against Dillard's and Samuel Moorer, individually and in his official capacity. The Commissioner also requested a jury trial. The Commissioner's prayer for relief requested an injunction against Dillard's to prevent continuing violations of REDA. In addition, as authorized by N.C.Gen.Stat. § 95-243, the Commissioner requested statutory and general damages that would inure to the benefit of Cleaver. On February 12, 1999, Dillard's filed an answer to the Complaint and a motion to dismiss the individual Defendant, Samuel Moorer from the Complaint. It is further alleged that on or about May 17, 1999, Judge Clarence W. Carter of the Forsyth County Superior Court granted Defendant's motion to dismiss Samuel Moorer from the case. As a result of the dismissal of Samuel Moorer from the case, Dillard's, pursuant to 28 U.S.C. § 1441(a), filed a Notice of Removal of this matter to this Court.

II. STANDARD OF REVIEW

The motion before the Court is Plaintiff's Motion to Remand this civil action which was brought in state court on a claim filed pursuant to a state statutory authority. Defendant, however, filed a notice of removal of the case to the United States District Court for the Middle District of North Carolina. Generally, such actions originally brought in state courts are properly removable only if the federal district court would have had original jurisdiction over the claim because it includes for matters involving federal questions or there is diversity jurisdiction. Specifically, removal of actions to federal court of actions originally brought in state court is governed 28 U.S.C. § 1441. In pertinent part, § 1441 provides as follows:

(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded.

(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

28 U.S.C. § 1441(a), (b) (emphasis added). Defendant contends that diversity jurisdiction exists because the real party in interest in this case is not the Commissioner of Labor but rather it is Cleaver, who filed the Complaint with the Department of Labor against Dillard's. Plaintiff disagrees and contends that the Commissioner of Labor is the real party in interest in this matter. Plaintiff contends that its Motion for Remand should be granted because the presence of the Commission of Labor defeats complete diversity in this case. The Court will address the arguments raised by both Plaintiff and Defendant.

III. DIVERSITY JURISDICTION AS GROUNDS FOR REMOVAL

The Court elects to address first Plaintiff's contention as to the status of the Commissioner of Labor in this case. In this instance, it is undisputed that the REDA action filed in the Forsyth County Superior Court of North Carolina does not directly raise any federal questions under either the Constitution, treaties or any federal statutes of which this court would have original jurisdiction. Therefore, jurisdiction for removal purposes, if it exists, must be based on diversity of citizenship as recognized above in 28 U.S.C. § 1441(b) and as provided for in 28 U.S.C. § 1332 which, in pertinent part, states that:

(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between—

(1) citizens of different States;

28 U.S.C. § 1332(a)(1).¹ However, "the burden of establishing federal jurisdiction is placed upon the party seeking removal. Because removal jurisdiction raises significant federalism concerns, we must strictly construe removal jurisdiction. If federal jurisdiction is doubtful, a remand is necessary." Turnamics, Inc. v. Advanced Envirotech Sys., 54 F.Supp.2d 581, 584 (W.D.N.C.1999) (quoting Mulcahey v. Columbia Organic Chem. Co. Inc., 29 F.3d 148, 151 (4th Cir.1994)). A presumption in favor of remand is necessary to prevent a federal court from reaching the merits of a pending motion in a removed case where subject matter jurisdiction for federal courts may be lacking, thereby depriving a state court of its rights under the Constitution to resolve controversies in its own courts. See University of South Alabama v. American Tobacco Co., 168 F.3d 405 (11th Cir.1999). Defendant, nevertheless, contends that there is subject matter jurisdiction based upon diversity jurisdiction under 28 U.S.C. § 1332(a)(1). However, for this Court to have jurisdiction on the basis of diversity, there must be complete diversity of state or foreign citizenship between each plaintiff and all defendants. See Owen Equip. and Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). Plaintiff contends that complete diversity does not exist in this case because the Commissioner represents the state and the Commissioner's presence in the case cannot be considered as a means of establishing diversity jurisdiction. See West Virginia v. Haynes, 348 F.Supp. 1374 (S.D.W.Va.1972); Roberson v. Dale, 464 F.Supp. 680, 686 (M.D.N.C. 1979) ("It is ... settled law that a federal court has no jurisdiction under 28 U.S.C. § 1332 to hear a case where the...